EXHIBIT 10.6
AMENDED AND RESTATED
SUPPLEMENTAL INCOME PLAN AGREEMENT
THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME PLAN AGREEMENT, made and
entered into the 1st day of January, 1994 and amended and restated this 14th day
of December, 1995, by and between Home Savings Bank, SSB, a mutual state savings
bank organized and existing under the laws of the State of North Carolina (the
"Bank"), and Xxxxxx X. Xxxx, (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Bank;
WHEREAS, the Bank recognizes the valuable services heretofore performed for
it by the Employee and wishes to encourage his continued employment;
WHEREAS, the Employee wishes to be assured that he will be entitled to a
certain amount of additional compensation for some definite period of time from
and after the termination of his employment with the Bank and that his
beneficiary will be entitled to a death benefit from and after the Employee's
death;
WHEREAS, the parties hereto wish to provide the terms and conditions upon
which the Bank shall pay such additional compensation to the Employee after the
termination of his employment with the Bank or such death benefit to his
beneficiary after the Employee's death; and
WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties hereto agree as follows:
Section 1. Retirement Benefits. Except as otherwise specifically provided
--------- -------------------
herein, if the Employee shall remain in the employment of the Bank until he
attains the age of 65 (the "Retirement Date") or such earlier date as the
parties hereto agree (the "Early Retirement Date"), the Bank shall pay the
Employee a minimum sum of $40,000.00 per annum for a period of fifteen (15)
years, payable in equal monthly installments, commencing on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Retirement Date or
Early Retirement Date, as applicable, occurs.
The Bank agrees to increase the minimum annual sum to be paid to the
Employee by five percent (5%) for each full year of employment completed by the
Employee after January 1, 1994 (e.g., January 2, 1994 through January 1, 1995
shall equal one full year of employment). Exhibit A attached hereto and
incorporated herein by reference sets forth in more detail the exact operation
and effect of this provision.
Section 2. Post-Retirement Death Benefits. In the event that the Employee
--------- ------------------------------
should die after becoming entitled to receive payments under Section 1 but
before all such payments have been made, the Bank will make all remaining
payments to such beneficiary or beneficiaries as the Employee has designated to
the Bank in writing (the "Beneficiaries"). In the event of the death of the
last living Beneficiary before all unpaid payments have been made, the balance
of any payments which remain unpaid at the time of the death of such Beneficiary
shall be commuted on the basis of six percent (6%) per annum compounded interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of such beneficiary designation, any amount remaining unpaid at
the Employee's death shall be commuted on the basis of six percent (6%) per
annum compounded interest and shall be paid in a single sum to the Employee's
estate.
Section 3. Pre-Retirement Death Benefits. In the event of the death of
--------- -----------------------------
the Employee while employed by the Bank and before the Retirement Date or Early
Retirement Date, the Bank shall make the payments described in Section 1 above
to the Beneficiaries. The first monthly payment shall be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the month in which the Employee died. In the event of
the death of the last living Beneficiary before all the payments have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die. In the absence of any such beneficiary designation, any
amount remaining unpaid at the Employee's death shall be commuted on the basis
of six percent (6%) per annum compounded interest and shall be paid in a single
sum to the Employee's estate. Notwithstanding the foregoing, if the Employee
dies as a result of suicide on or before January 1, 1996, no benefits of
whatever nature shall be payable to the Beneficiaries under this Agreement.
Section 4. Termination Benefits. Except as otherwise provided in Section
--------- --------------------
1 with respect to retirement at the Early Retirement Date and in Section 6 with
respect to termination of employment by the Bank in certain circumstances, in
the event that the employment of the Employee terminates prior to the time he is
first entitled to receive payments under this Agreement for any reason other
than his death, the Employee or his Beneficiaries, as applicable, shall be
entitled, upon the occurrence of the Employee's 55th birthday or prior death, to
receive the percentage of the applicable annual payment described in Section 1
above determined by Exhibit B attached hereto and incorporated herein by
reference. Such payments shall be made in equal monthly installments, with the
first monthly installment commencing on a date to be determined by the Bank, but
in no event later than the first day of the sixth calendar month following the
calendar month of the Employee's 55th birthday or death, as applicable, occurs.
Section 5. Benefits Not Transferable. Neither the Employee, any
--------- -------------------------
Beneficiary nor any other person claiming any right or interest under this
Agreement through the Employee or any Beneficiary shall have any right to
commute, assign, transfer or otherwise convey the right to receive any benefits
hereunder.
2
Section 6. Binding Upon Successors. This Agreement and the Bank's
--------- -----------------------
obligations hereunder shall be binding upon the Bank's successors and permitted
assigns. The Bank may not assign its rights or obligations under this Agreement
without the Employee's prior written consent. In addition, the Bank shall not
enter into any agreement providing for the merger of the Bank with and into
another business entity or the sale of more than a majority of the Bank's assets
to another business entity, person or group of persons that does not
specifically provide that such successor by merger or purchaser(s) of assets
shall assume and satisfy each and every obligation of the Bank to the Employee
under this Agreement. In the case of an asset sale, such assumption shall not
relieve the Bank of its liability to fulfill such obligations.
Except as otherwise provided in Sections 1, 2 or 3, as applicable, in the
event that, on or before the occurrence of the Retirement Date, the Employee's
employment with the Bank is terminated for any reason coincident with or within
twenty-four (24) months following a merger of the Bank with or into another
business entity or of an asset sale as described above, then the Employee shall
be deemed to have retired as of his Early Retirement Date and the provisions of
Section 1 shall be deemed applicable, except that the Early Retirement Date
shall be deemed to be the date that such merger or asset sale shall be
consummated.
Section 7. Benefits Payable Only From General Corporate Assets; Unsecured
--------- --------------------------------------------------------------
General Creditor Status of Employee.
-----------------------------------
The payments to the Employee or his Beneficiaries hereunder shall be made
from assets which shall continue, for all purposes, to be a part of the general,
unrestricted assets of the Bank; no person shall have nor acquire any interest
in any such assets by virtue of the provisions of this Agreement. The Bank's
obligations hereunder shall be an unfunded and unsecured promise to pay money in
the future. To the extent that the Employee or any person acquires a right to
receive payments from the Bank under the provisions hereof, such right shall be
no greater than the right of any unsecured general creditor of the Bank; no such
person shall have nor require any legal or equitable right, interest or claim in
or to any property or assets of the Bank.
In the event that, in its discretion, the Bank purchases an insurance
policy or policies insuring the life of the Employee (or any other property) in
order to allow the Bank to recover the cost of providing the benefits, in whole,
or in part, hereunder, neither the Employee nor any Beneficiary shall have the
rights whatsoever therein or in the proceeds therefrom. The Bank shall be the
sole owner and beneficiary of any such policy or policies and, as such, shall
possess and, may exercise all incidents of ownership therein.
Section 8. Additional Benefits. The benefits and rights provided under
--------- -------------------
this Agreement are in addition to, and independent of, those rights and benefits
of the Employee provided under other agreements with the Bank, and shall not
affect, reduce or diminish the right of Employee to participate in any current
or future retirement plan or in any supplemental compensation arrangement.
3
Section 9. No Contract of Employment. Nothing contained herein shall be
--------- -------------------------
construed to be a contract of employment or as conferring upon the Employee the
right to continue to be employed by the Bank. It is expressly understood by the
parties hereto that this Agreement relates exclusively to additional
compensation for the Employee's services, payable after termination of his
employment with the Bank, and is not intended to be an employment agreement.
Xxxxxx 00. Claims and Review Procedures.
--------- ----------------------------
A. General. For the purposes of implementing a claims procedure under
-------
this Agreement as required by the Employee Retirement Income Security Act of
1974 ("ERISA") (but not for any other purpose), the Bank is hereby designated as
the named fiduciary and Plan Administrator of this unfunded, nonqualified
deferred compensation plan. If any person believes he is being denied any rights
or benefits under the Agreement, such person may file a claim in writing with
the Plan Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 10.
B. Claims Procedure. If any claim filed hereunder is wholly or
----------------
partially denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain:
(i) specific reasons for the denial,
(ii) specific reference to pertinent provisions of the Agreement on
which the Plan Administrator based its denial,
(iii) a description of any additional material or information
necessary for the claimant to perfect such claim and an
explanation of why such material or information is necessary,
and
(iv) information as to the steps to be taken if the claimant wishes
to submit a request for review.
Such notification will be given within ninety (90) days after the
claim is received by the Plan Administrator (or within 180 days, if
special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is
given to the claimant within the initial ninety (90) day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and the claimant
may request a review of his claim in accordance with Section 10.C.
hereof.
C. Review Procedure. Within sixty (60) days after the date on which a
----------------
claimant receives a written notice of a denied claim (or, if
applicable, within sixty (60) days
4
after the date on which such denial is considered to have occurred)
the claimant (or his duly authorized representative) may:
(i) file a written request with the Plan Administrator for a review
of his denied claim and of pertinent documents; and
(ii) submit written issues and comments to the Plan Administrator.
The Plan Administrator will notify the claimant of its decision in
writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain specific reasons for
the decision as well as specific references to perti nent provisions
of the Agreement. The decision on review will be made within sixty
(60) days after the request for review is received by the Plan
Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request
(such as an election by the Plan Administrator to hold a hearing), and
if written notice of such extension and circumstances is given to the
claimant within the initial sixty (60) day period.
Section 11. Amendment. This Agreement may not be amended, altered or
---------- ---------
modified, except by a written instrument signed by the parties hereto or their
respective successors, and may not be otherwise terminated except as provided
herein.
Section 12. Governing Law. This Agreement, and the rights of the parties
---------- -------------
hereunder, shall be governed by and construed in accordance with the laws of the
State of North Carolina.
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Supplemental Income Plan Agreement as of the day and year first written above.
HOME SAVINGS BANK, SSB
Attest: By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx
/s/ Xxxx Xxxxx Title: Executive Vice President
--------------------------
Xxxx Xxxxx
Secretary
[Corporate Seal] EMPLOYEE:
/s/ Xxxxxx X. Xxxx
---------------------------------------------
Xxxxxx X. Xxxx
5
EXHIBIT A
FULL YEARS OF EMPLOYMENT
AFTER JANUARY 1, 1994 ADJUSTED ANNUAL PAYMENT
--------------------- -----------------------
1 $ 40,000
2 42,000
3 44,100
4 46,305
5 48,620
6 51,051
7 53,603
8 56,284
9 59,098
10 62,053
11 65,155
12 68,413
13 71,834
14 75,425
15 79,197
16 83,157
17 87,315
18 91,680
19 96,265
20 101,078
21 106,132
EXHIBIT B
PERCENTAGE OF THE ANNUAL
INSTALLMENT PAYMENT STATED
IN SECTION 1 OF THIS AGREEMENT
FULL YEARS OF EMPLOYMENT TO WHICH THE EMPLOYEE
AFTER JANUARY 1, 1994 IS ENTITLED
------------------------ ------------------------------
1 10%
2 20
3 30
4 40
5 50
6 60
7 70
8 80
9 90
10 100
AMENDED AND RESTATED
SUPPLEMENTAL INCOME PLAN AGREEMENT
THIS AMENDED AND RESTATED SUPPLEMENTAL INCOME PLAN AGREEMENT, made and
entered into the 4th day of November, 1994 and amended and restated this 14th
day of December, 1995, by and between Home Savings Bank, SSB, a mutual state
savings bank organized and existing under the laws of the State of North
Carolina (the "Bank"), and Xxxxxxx X. Xxxx, (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Bank;
WHEREAS, the Bank recognizes the valuable services heretofore performed for
it by the Employee and wishes to encourage his continued employment;
WHEREAS, the Employee wishes to be assured that he will be entitled to a
certain amount of additional compensation for some definite period of time from
and after the termination of his employment with the Bank and that his
beneficiary will be entitled to a death benefit from and after the Employee's
death;
WHEREAS, the parties hereto wish to provide the terms and conditions upon
which the Bank shall pay such additional compensation to the Employee after the
termination of his employment with the Bank or such death benefit to his
beneficiary after the Employee's death; and
WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties hereto agree as follows:
Section 1. Retirement Benefits. Except as otherwise specifically provided
--------- -------------------
herein, if the Employee shall remain in the employment of the Bank until he
attains the age of 65 (the "Retirement Date") or such earlier date as the
parties hereto agree (the "Early Retirement Date"), the Bank shall pay the
Employee the sum of $20,000.00 per annum for a period of fifteen (15) years,
payable in equal monthly installments, commencing on a date to be determined by
the Bank, but in no event later than the first day of the sixth calendar month
following the calendar month in which the Retirement Date or Early Retirement
Date, as applicable, occurs.
Section 2. Post-Retirement Death Benefits. In the event that the Employee
--------- ------------------------------
should die after becoming entitled to receive payments under Section 1 but
before all such payments have been made, the Bank will make all remaining
payments to such beneficiary or beneficiaries as the Employee has designated to
the Bank in writing (the "Beneficiaries"). In the event of the death of the
last living Beneficiary before all unpaid payments have been made, the balance
of any payments
which remain unpaid at the time of the death of such Beneficiary shall be
commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die. In
the absence of such beneficiary designation, any amount remaining unpaid at the
Employee's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the Employee's estate.
Section 3. Pre-Retirement Death Benefits. In the event of the death of
--------- -----------------------------
the Employee while employed by the Bank and before the Retirement Date or Early
Retirement Date, the Bank shall make the payments described in Section 1 above
to the Beneficiaries. The first monthly payment shall be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the month in which the Employee died. In the event of
the death of the last living Beneficiary before all the payments have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die. In the absence of any such beneficiary designation, any
amount remaining unpaid at the Employee's death shall be commuted on the basis
of six percent (6%) per annum compounded interest and shall be paid in a single
sum to the Employee's estate. Notwithstanding the foregoing, if the Employee
dies as a result of suicide on or before November 4, 1996, no benefits of
whatever nature shall be payable to the Beneficiaries under this Agreement.
Section 4. Termination Benefits. Except as otherwise provided in Section
--------- --------------------
1 with respect to retirement at the Early Retirement Date and in Section 6 with
respect to termination of employment by the Bank in certain circumstances, in
the event that the employment of the Employee terminates prior to the time he is
first entitled to receive payments under this Agreement for any reason other
than his death, the Employee or his Beneficiaries, as applicable, shall be
entitled, upon the occurrence of the Employee's 58th birthday or prior death, to
receive the percentage of the applicable annual payment described in Section 1
above determined by Exhibit A attached hereto and incorporated herein by
reference. Such payments shall be made in equal monthly installments, with the
first monthly installment commencing on a date to be determined by the Bank, but
in no event later than the first day of the sixth calendar month following the
calendar month of the Employee's 58th birthday or death, as applicable, occurs.
Section 5. Benefits Not Transferable. Neither the Employee, any
--------- -------------------------
Beneficiary nor any other person claiming any right or interest under this
Agreement through the Employee or any Beneficiary shall have any right to
commute, assign, transfer or otherwise convey the right to receive any benefits
hereunder.
Section 6. Binding Upon Successors. This Agreement and the Bank's
--------- -----------------------
obligations hereunder shall be binding upon the Bank's successors and permitted
assigns. The Bank may not assign its rights or obligations under this Agreement
without the Employee's prior written consent. In addition, the Bank shall not
enter into any agreement providing for the merger of the Bank with and into
another business entity or the sale of more than a majority of the Bank's assets
to another business entity, person or group of persons that does not
specifically provide that such successor by
2
merger or purchaser(s) of assets shall assume and satisfy each and every
obligation of the Bank to the Employee under this Agreement. In the case of an
asset sale, such assumption shall not relieve the Bank of its liability to
fulfill such obligations.
Except as otherwise provided in Sections 1, 2 or 3, as applicable, in the
event that, on or before the occurrence of the Retirement Date, the Employee's
employment with the Bank is terminated for any reason coincident with or within
twenty-four (24) months following a merger of the Bank with or into another
business entity or of an asset sale as described above, then the Employee shall
be deemed to have retired as of his Early Retirement Date and the provisions of
Section 1 shall be deemed applicable, except that the Early Retirement Date
shall be deemed to be the date that such merger or asset sale shall be
consummated.
Section 7. Benefits Payable Only From General Corporate Assets; Unsecured
--------- --------------------------------------------------------------
General Creditor Status of Employee.
-----------------------------------
The payments to the Employee or his Beneficiaries hereunder shall be made
from assets which shall continue, for all purposes, to be a part of the general,
unrestricted assets of the Bank; no person shall have nor acquire any interest
in any such assets by virtue of the provisions of this Agreement. The Bank's
obligations hereunder shall be an unfunded and unsecured promise to pay money in
the future. To the extent that the Employee or any person acquires a right to
receive payments from the Bank under the provisions hereof, such right shall be
no greater than the right of any unsecured general creditor of the Bank; no such
person shall have nor require any legal or equitable right, interest or claim in
or to any property or assets of the Bank.
In the event that, in its discretion, the Bank purchases an insurance
policy or policies insuring the life of the Employee (or any other property) in
order to allow the Bank to recover the cost of providing the benefits, in whole,
or in part, hereunder, neither the Employee nor any Beneficiary shall have the
rights whatsoever therein or in the proceeds therefrom. The Bank shall be the
sole owner and beneficiary of any such policy or policies and, as such, shall
possess and, may exercise all incidents of ownership therein.
Section 8. Additional Benefits. The benefits and rights provided under
--------- -------------------
this Agreement are in addition to, and independent of, those rights and benefits
of the Employee provided under other agreements with the Bank, and shall not
affect, reduce or diminish the right of Employee to participate in any current
or future retirement plan or in any supplemental compensation arrangement.
Section 9. No Contract of Employment. Nothing contained herein shall be
--------- -------------------------
construed to be a contract of employment or as conferring upon the Employee the
right to continue to be employed by the Bank. It is expressly understood by the
parties hereto that this Agreement relates exclusively to additional
compensation for the Employee's services, payable after termination of his
employment with the Bank, and is not intended to be an employment agreement.
3
Section 10. Claims and Review Procedures.
---------- ----------------------------
A. General. For the purposes of implementing a claims procedure under
-------
this Agreement as required by the Employee Retirement Income Security
Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
hereby designated as the named fiduciary and Plan Administrator of
this unfunded, nonqualified deferred compensation plan. If any person
believes he is being denied any rights or benefits under the
Agreement, such person may file a claim in writing with the Plan
Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 10.
B. Claims Procedure. If any claim filed hereunder is wholly or partially
----------------
denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner
calculated to be understood by the claimant and will contain:
(i) specific reasons for the denial,
(ii) specific reference to pertinent provisions of the Agreement on
which the Plan Administrator based its denial,
(iii) a description of any additional material or information
necessary for the claimant to perfect such claim and an
explanation of why such material or information is necessary,
and
(iv) information as to the steps to be taken if the claimant wishes
to submit a request for review.
Such notification will be given within ninety (90) days after the
claim is received by the Plan Administrator (or within 180 days, if
special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is
given to the claimant within the initial ninety (90) day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and the claimant
may request a review of his claim in accordance with Section 10.C.
hereof.
C. Review Procedure. Within sixty (60) days after the date on which a
----------------
claimant receives a written notice of a denied claim (or, if
applicable, within sixty (60) days after the date on which such denial
is considered to have occurred) the claimant (or his duly authorized
representative) may:
(i) file a written request with the Plan Administrator for a
review of his denied claim and of pertinent documents; and
4
(ii) submit written issues and comments to the Plan Administrator.
The Plan Administrator will notify the claimant of its decision in
writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain specific reasons for
the decision as well as specific references to perti nent provisions
of the Agreement. The decision on review will be made within sixty
(60) days after the request for review is received by the Plan
Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request
(such as an election by the Plan Administrator to hold a hearing), and
if written notice of such extension and circumstances is given to the
claimant within the initial sixty (60) day period.
Section 11. Amendment. This Agreement may not be amended, altered or
---------- ---------
modified, except by a written instrument signed by the parties hereto or their
respective successors, and may not be otherwise terminated except as provided
herein.
Section 12. Governing Law. This Agreement, and the rights of the parties
---------- -------------
hereunder, shall be governed by and construed in accordance with the laws of the
State of North Carolina.
IN WITNESS WHEREOF, the parties have executed this Amended and Restated
Supplemental Income Plan Agreement as of the day and year first written above.
HOME SAVINGS BANK, SSB
Attest: By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Xxxxxx X. Xxxx
/s/ Xxxx Xxxxx Title: President
--------------------------------
Xxxx Xxxxx
Secretary
[Corporate Seal] EMPLOYEE:
/s/ Xxxxxxx X. Xxxx
----------------------------------------
Xxxxxxx X. Xxxx
5
EXHIBIT A
PERCENTAGE OF THE ANNUAL
INSTALLMENT PAYMENT STATED
IN SECTION 1 OF THIS AGREEMENT
FULL YEARS OF EMPLOYMENT TO WHICH THE EMPLOYEE
AFTER NOVEMBER 4, 1994 IS ENTITLED
---------------------- ------------------------------
1 10%
2 20
3 30
4 40
5 50
6 60
7 70
8 80
9 90
10 100
SUPPLEMENTAL INCOME PLAN AGREEMENT
THIS AGREEMENT, made and entered into the 1st day of March, 1996, by and
between Home Savings Bank, SSB, a mutual state savings bank organized and
existing under the laws of the State of North Carolina (the "Bank"), and Xxxxxx
X. house, (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Bank;
WHEREAS, the Bank recognizes the valuable services heretofore performed for
it by the Employee and wishes to encourage his continued employment;
WHEREAS, the Employee wishes to be assured that he will be entitled to a
certain amount of additional compensation for some definite period of time from
and after the termination of his employment with the Bank and that his
beneficiary will be entitled to a death benefit from and after the Employee's
death;
WHEREAS, the parties hereto wish to provide the terms and conditions upon
which the Bank shall pay such additional compensation to the Employee after the
termination of his employment with the Bank or such death benefit to his
beneficiary after the Employee's death.
WHEREAS, the parties desire to amend the Agreement and to restate the
Agreement as amended.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties hereto agree as follows:
Section 1. Retirement Benefits. Except as otherwise specifically provided
--------- -------------------
herein, if the Employee shall remain in the employment of the Bank until he
attains the age of 65 (the "Retirement Date") or such earlier date as the
parties hereto agree (the "Early Retirement Date"), the Bank shall pay the
Employee a minimum sum of $10,000.00 per annum for a period of fifteen (15)
years, payable in equal monthly installments, commencing on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Retirement Date or
Early Retirement Date, as applicable, occurs.
Section 2. Post-Retirement Death Benefits. In the event that the Employee
--------- ------------------------------
should die after becoming entitled to receive payments under Section 1 but
before all such payments have been made, the Bank will make all remaining
payments to such beneficiary or beneficiaries as the Employee has designated to
the Bank in writing (the "Beneficiaries"). In the event of the death of the
last living Beneficiary before all unpaid payments have been made, the balance
of any payments which remain unpaid at the time of the death of such Beneficiary
shall be commuted on the basis of six percent (6%) per annum compounded interest
and shall be paid in a single sum to the estate of the last Beneficiary to die.
In the absence of such beneficiary designation, any amount remaining unpaid at
the Employee's death shall be commuted on the basis of six percent (6%) per
annum compounded interest and shall be paid in a single sum to the Employee's
estate.
Section 3. Pre-Retirement Death Benefits. In the event of the death of
--------- -----------------------------
the Employee while employed by the Bank and before the Retirement Date or Early
Retirement Date, the Bank shall make the payments described in Section 1 above
to the Beneficiaries. The first monthly payment shall be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the month in which the Employee died. In the event of
death of the last living Beneficiary before all the payments have been made, the
balance of any payments which remain unpaid at the time of such Beneficiary's
death shall be commuted on the basis of six percent (6%) per annum compounded
interest and shall be paid in a single sum to the estate of the last Beneficiary
to die. In the absence of any such beneficiary designation, any amount remaining
unpaid at the Employee's death shall be commuted on the basis of six percent
(6%) per annum compounded interest and shall be paid in a single sum to the
Employee's estate. Notwithstanding the foregoing, if the Employee dies as a
result of suicide on or before February 28, 1998, no benefits of whatever nature
shall be payable to the Beneficiaries under this Agreement.
Section 4. Termination Benefits. Except as otherwise provided in Section
--------- --------------------
1 with respect to retirement at the Early Retirement Date and in Section 6 with
respect to termination of employment by the Bank in certain circumstances, in
the event that the employment of the Employee terminates prior to the time he is
first entitled to receive payments under this Agreement for any reason other
than his death, the Employee or his Beneficiaries, as applicable, shall be
entitled, upon the occurrence of the Employee's 60th birthday or prior death, to
receive the percentage of the applicable annual payment described in Section 1
above determined by Exhibit A attached hereto and incorporated herein by
reference. Such payments shall be made in equal monthly installments, with the
first monthly installment commencing on a date to be determined by the Bank, but
in no event later than the first day of the sixth calendar month following the
calendar month of the Employee's 60th birthday or death, as applicable, occurs.
Section 5. Benefits Not Transferable. Neither the Employee, any
--------- -------------------------
Beneficiary nor any other person claiming any right or interest under this
Agreement through the Employee or any Beneficiary shall have any right to
commute, assign, transfer or otherwise convey the right to receive any benefits
hereunder.
2
Section 6. Binding Upon Successors. This Agreement and the Bank's
--------- -----------------------
obligations hereunder shall be binding upon the Bank's successors and permitted
assigns. The Bank may not assign its rights or obligations under this Agreement
without the Employee's prior written consent. In addition, the Bank shall not
enter into any agreement providing for the merger of the Bank with and into
another business entity or the sale of more than a majority of the Bank's assets
to another business entity, person or group of persons that does not
specifically provide that such successor by merger or purchaser(s) of assets
shall assume and satisfy each and every obligation of the Bank to the Employee
under this Agreement. In the case of an asset sale, such assumption shall not
relieve the Bank of its liability to fulfill such obligations.
Except as otherwise provided in Sections 1, 2 or 3, as applicable, in the
event that, on or before the occurrence of the Retirement Date, the Employee's
employment with the Bank is terminated for any reason coincident with or within
twenty-four (24) months following a merger of the Bank with or into another
business entity or of an asset sale as described above, then the Employee shall
be deemed to have retired as of his Early Retirement Date and the provisions of
Section 1 shall be deemed applicable, except that the Early Retirement Date
shall be deemed to be the date that such merger or asset sale shall be
consummated.
Section 7. Benefits Payable Only From General Corporate Assets; Unsecured
--------- --------------------------------------------------------------
General Creditor Status of Employee.
------------------------------------
The payments to the Employee or his Beneficiaries hereunder shall be made
from assets which shall continue, for all purposes, to be a part of the general,
unrestricted assets of the Bank; no person shall have nor acquire any interest
in any such assets by virtue of the provisions of this Agreement. The Bank's
obligations hereunder shall be an unfunded and unsecured promise to pay money in
the future. To the extent that the Employee or any person acquires a right to
receive payments from the Bank under the provisions hereof, such right shall be
no greater than the right of any unsecured general creditor of the Bank; no such
person shall have nor require any legal or equitable right, interest or claim in
or to any property or assets of the Bank.
In the event that, in its discretion, the Bank purchases an insurance
policy or policies insuring the life of the Employee (or any other property) in
order to allow the Bank to recover the cost of providing the benefits, in whole,
or in part, hereunder, neither the Employee nor any beneficiary shall have the
rights whatsoever therein or in the proceeds therefrom. The Bank shall be the
sole owner and beneficiary of any such policy or policies and, as such, shall
possess and, may exercise all incidents of ownership therein.
Section 8. Additional Benefits. The benefits and rights provided under
--------- -------------------
this Agreement are in addition to, and independent of, those rights and benefits
of the Employee provided under other agreements with the Bank, and shall not
affect, reduce or diminish the right of Employee to participate in any current
or future retirement plan or in any supplemental compensation arrangement.
3
Section 9. No Contract of Employment. Nothing contained herein shall be
--------- -------------------------
construed to be a contract of employment or as conferring upon the Employee the
right to continue to be employed by the Bank. It is expressly understood by the
parties hereto that this Agreement relates exclusively to additional
compensation for the Employee's services, payable after termination of his
employment with the Bank, and is not intended to be an employment agreement.
Xxxxxx 00. Claims and Review Procedures.
--------- -----------------------------
A. General. For the purposes of implementing a claims procedure under
-------
this Agreement as required by the Employee Retirement Income Security
Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
hereby designated as the named fiduciary and Plan Administrator of
this unfunded, nonqualified deferred compensation plan. If any person
believes he is being denied any rights or benefits under the
Agreement, such person may file a claim in writing with the Plan
Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 10.
B. Claims Procedure. If any claim filed hereunder is wholly or partially
----------------
denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner
calculated to be understood by the claimant and will contain:
(i) specific reasons for the denial,
(ii) specific reference to pertinent provisions of the Agreement on
which the Plan Administrator based its denial,
(iii) a description of any additional material or information
necessary for the claimant to perfect such claim and an
explanation of why such material or information is necessary,
and
(iv) information as to the steps to be taken if the claimant wishes
to submit a request for review.
Such notification will be given within ninety (90) days after the
claim is received by the Plan Administrator (or within 180 days, if
special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is
given to the claimant within the initial ninety (90) day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and the claimant
may request a review of his claim in accordance with Section 10.C.
hereof.
4
C. Review Procedure. Within sixty (60) days after the date on which a
----------------
claimant receives a written notice of a denied claim (or, if
applicable, within sixty (60) days after the date on which such denial
is considered to have occurred) the claimant (or his duly authorized
representative) may:
(i) file a written request with the Plan Administrator for a review
of his denied claim and of pertinent documents; and
(ii) submit written issues and comments to the Plan Administrator.
The Plan Administrator will notify the claimant of its decision in
writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain specific reasons for
the decision as well as specific references to pertinent provisions of
the Agreement. The decision on review will be made within sixty (60)
days after the request for review is received by the Plan
Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request
(such as an election by the Plan Administrator to hold a hearing), and
if written notice of such extension and circumstances is given to the
claimant within the initial sixty (60) day period.
Section 11. Amendment. This Agreement may not be amended, altered or
---------- ---------
modified, except by a written instrument signed by the parties hereto or their
respective successors, and may not be otherwise terminated except as provided
herein.
Section 12. Governing Law. This Agreement, and the rights of the parties
---------- -------------
hereunder, shall be governed by and construed in accordance with the laws of the
State of North Carolina.
IN WITNESS WHEREOF, the parties have executed this Supplemental Income Plan
Agreement as of the day and year first written above.
HOME SAVINGS BANK, SSB
Attest: By: /s/ Xxxxxx X. Xxxx
----------------------------------
Xxxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxx Title: President
----------------------------
Xxxxxxx X. Xxxx
Secretary
[Corporate Seal] EMPLOYEE:
/s/ Xxxxxx X. House
----------------------------------------
Xxxxxx X. House
5
EXHIBIT A
PERCENTAGE OF THE ANNUAL
INSTALLMENT PAYMENT STATED
IN SECTION 1 OF THIS AGREEMENT
FULL YEARS OF EMPLOYMENT TO WHICH THE EMPLOYEE
AFTER MARCH 31, 1996 IS ENTITLED
-------------------- ------------------------------
1 10%
2 20
3 30
4 40
5 50
6 60
7 70
8 80
9 90
10 100
SUPPLEMENTAL INCOME PLAN AGREEMENT
THIS AGREEMENT, made and entered into the 1st day of March, 1996, by and
between Home Savings Bank, SSB, a mutual state savings bank organized and
existing under the laws of the State of North Carolina (the "Bank"), and Xxxxx
X. Xxxxxxx, XX., (the "Employee")
W I T N E S S E T H:
WHEREAS, the Employee is employed by the Bank;
WHEREAS, the Bank recognizes the valuable services heretofore performed for
it by the Employee and wishes to encourage his continued employment;
WHEREAS, the Employee wishes to be assured that he will be entitled to a
certain amount of additional compensation for some definite period of time from
and after the termination of his employment with the Bank and that his
beneficiary will be entitled to a death benefit from and after the Employee's
death;
WHEREAS, the parties hereto wish to provide the terms and conditions upon
which the Bank shall pay such additional compensation to the Employee after the
termination of his employment with the Bank or such death benefit to his
beneficiary after the Employee's death.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
herein contained, the parties hereto agree as follows:
Section 1. Retirement Benefits. Except as otherwise specifically provided
--------- -------------------
herein, if the Employee shall remain in the employment of the Bank until he
attains the age of 65 (the "Retirement Date") or such earlier date as the
parties hereto agree (the "Early Retirement Date"), the Bank shall pay the
Employee a minimum sum of $10,000.00 per annum for a period of fifteen (15)
years, payable in equal monthly installments, commencing on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the calendar month in which the Retirement Date or
Early Retirement Date, as applicable, occurs.
Section 2. Post-Retirement Death Benefits. In the event that the Employee
--------- ------------------------------
should die after becoming entitled to receive payments under Section 1 but
before all such payments have been made, the Bank will make all remaining
payments to such beneficiary or beneficiaries as the Employee has designated to
the Bank in writing (the "Beneficiaries"). In the event of death of the last
living Beneficiary before all unpaid payments have been made, the balance of any
payments which remain unpaid at the time of the death of such Beneficiary shall
be commuted on the basis of six percent (6%) per annum compounded interest and
shall be paid in a single sum to the estate of the last Beneficiary to die. In
the absence of such beneficiary designation, any amount remaining unpaid at the
Employee's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the Employee's estate.
Section 3. Pre-Retirement Death Benefits. In the event of the death of
--------- -----------------------------
the Employee while employed by the Bank and before the Retirement Date or Early
Retirement Date, the Bank shall make the payments described in Section 1 above
to the Beneficiaries. The first monthly payment shall be made on a date to be
determined by the Bank, but in no event later than the first day of the sixth
calendar month following the month in which the Employee died. In the event of
death of the last living Beneficiary before all the payments have been made,
the balance of any payments which remain unpaid at the time of such
Beneficiary's death shall be commuted on the basis of six percent (6%) per annum
compounded interest and shall be paid in a single sum to the estate of the last
Beneficiary to die. In the absence of any such beneficiary designation, any
amount remaining unpaid at the Employee's death shall be commuted on the basis
of six percent (6%) per annum compounded interest and shall be paid in a single
sum to the Employee's estate. Notwithstanding the foregoing, if the Employee
dies as a result of suicide on or before February 28, 1996, no benefits of
whatever nature shall be payable to the Beneficiaries under this Agreement.
Section 4. Termination Benefits. Except as otherwise provided in Section
--------- --------------------
1 with respect to retirement at the Early Retirement Date and in Section 6 with
respect to termination of employment by the Bank in certain circumstances, in
the event that the employment of the Employee terminates prior to the time he is
first entitled to receive payments under this Agreement for any reason other
than his death, the Employee or his Beneficiaries, as applicable, shall be
entitled, upon the occurrence of the Employee's 60th birthday or prior death, to
receive the percentage of the applicable annual payment described in Section 1
above determined by Exhibit A attached hereto and incorporated herein by
reference. Such payments shall be made in equal monthly installments, with the
first monthly installment commencing on a date to be determined by the Bank, but
in no event later than the first day of the sixth calendar month following the
calendar month of the Employee's 60th birthday or death, as applicable, occurs.
Section 5. Benefits Not Transferable. Neither the Employee, any
--------- -------------------------
Beneficiary nor any other person claiming any right or interest under this
Agreement through the Employee or any other Beneficiary shall have any right
to commute, assign, transfer or otherwise convey the right to receive any
benefits hereunder.
2
Section 6. Binding Upon Successors. This Agreement and the Bank's
--------- -----------------------
obligations hereunder shall be binding upon the Bank's successors and permitted
assigns. The Bank may not assign its rights or obligations under this Agreement
without the Employee's prior written consent. In addition, the Bank shall not
enter into any agreement providing for the merger of the Bank with and into
another business entity or the sale of more than a majority of the Bank's assets
to another business entity, person or group of persons that does not
specifically provide that such successor by merger or purchaser(s) of assets
shall assume and satisfy each and every obligation of the Bank to the Employee
under this Agreement. In the case of an asset sale, such assumption shall not
relieve the Bank of its liability to fulfill such obligations.
Except as otherwise provided in Sections 1, 2 or 3, as applicable, in the
event that, on or before the occurrence of the Retirement Date, the Employee's
employment with the Bank is terminated for any reason coincident with or within
twenty-four (24) months following a merger of the Bank with or into another
business entity or of an asset sale as described above, then the Employee shall
be deemed to have retired as of his Early Retirement Date and the provisions of
Section 1 shall be deemed applicable, except that the Early Retirement Date
shall be deemed to be the date that such merger or asset sale shall be
consummated.
Section 7. Benefits Payable Only from General Corporate Assets; Unsecured
--------- --------------------------------------------------------------
General Creditor Status of Employee.
-----------------------------------
The payments to the Employee or his Beneficiaries hereunder shall be made
from assets which shall continue, for all purposes, to be a part of the general,
unrestricted assets of the Bank; no person shall have nor acquire any interest
in any such assets by virtue of the provisions of this Agreement. The Bank's
obligations hereunder shall be an unfunded and unsecured promise to pay money in
the future. To the extent that the Employee or any person acquires a right to
receive payments from the Bank under the provisions hereof, such right shall be
no greater than the right of any unsecured general creditor of the Bank; no such
person shall have nor require any legal or equitable right, interest or claim in
or to any property or assets of the Bank.
In the event that, in its discretion, the Bank purchases an insurance
policy or policies insuring the life of the Employee (or any other property) in
order to allow the Bank to recover the cost of providing the benefits, in whole,
or in part, hereunder, neither the Employee nor any beneficiary shall have the
rights whatsoever therein or in the proceeds therefrom. The Bank shall be the
sole owner and beneficiary of any such policy or policies and, as such, shall
possess and, may exercise all incidents of ownership therein.
Section 8. Additional Benefits. The benefits and rights provided under
--------- -------------------
this Agreement are in addition to, and independent of, those rights and benefits
of the Employee provided under other agreements with the Bank, and shall not
affect, reduce or diminish the right of Employee to participate in any current
or future retirement plan or in any supplemental compensation arrangement.
3
Section 9. No Contract of Employment. Nothing contained herein shall be
--------- -------------------------
construed to be a contract of employment or as conferring upon the Employee the
right to continue to be employed by the Bank. It is expressly understood by the
parties hereto that this Agreement relates exclusively to additional
compensation for the Employee's services, payable after termination of his
employment with the Bank, and is not intended to be an employment agreement.
Xxxxxx 00. Claims and Review Procedures.
--------- ----------------------------
A. General. For the purposes of implementing a claims procedure under
-------
this Agreement as required by the Employee Retirement Income Security
Act of 1974 ("ERISA") (but not for any other purpose), the Bank is
hereby designated as the named fiduciary and Plan Administrator of
this unfunded, nonqualified deferred compensation plan. If any person
believes he is being denied any rights or benefits under the
Agreement, such person may file a claim in writing with the Plan
Administrator for resolution in accordance with the provisions of
Paragraph B of this Section 10.
B. Claims Procedure. If any claim filed hereunder is wholly or partially
----------------
denied, the Plan Administrator will notify the claimant of its
decision in writing. Such notification will be written in a manner
calculated to be understood by the claimant and will contain:
(i) specific reasons for the denial,
(ii) specific reference to pertinent provisions of the Agreement on
which the Plan Administrator based its denial,
(iii) a description of any additional material or information
necessary for the claimant to perfect such claim and an
explanation of why such material or information is necessary,
and
(iv) information as to the steps to be taken if the claimant wishes
to submit a request for review.
Such notification will be given within ninety (90) days after the
claim is received by the Plan Administrator (or within 180 days, if
special circumstances require an extension of time for processing the
claim, and if written notice of such extension and circumstances is
given to the claimant within the initial ninety (90) day period). If
such notification is not given within such period, the claim will be
considered denied as of the last day of such period and the claimant
may request a review of his claim in accordance with Section 10.C.
hereof.
4
C. Review Procedure. Within sixty (60) days after the date on which a
----------------
claimant receives a written notice of a denied claim (or, if
applicable, within sixty (60) days after the date on which such denial
is considered to have occurred) the claimant (or his duly authorized
representative) may:
(i) file a written request with the Plan Administrator for a review
of his denied claim and of pertinent documents; and
(ii) submit written issues and comments to the Plan Administrator.
The Plan Administrator will notify the claimant of its decision in
writing. Such notification will be written in a manner calculated to
be understood by the claimant and will contain specific reasons for
the decision as well as specific references to pertinent provisions of
the Agreement. The decision on review will be made within sixty (60)
days after the request for review is received by the Plan
Administrator (or within one hundred twenty (120) days, if special
circumstances require an extension of time for processing the request
(such as an election by the Plan Administrator to hold a hearing), and
if written notice of such extension and circumstances is given to the
claimant within the initial sixty (60) day period.
Section 11. Amendment. This Agreement may not be amended, altered or
---------- ---------
modified, except by a written instrument signed by the parties hereto or their
respective successors, and may not be otherwise terminated except as provided
herein.
Section 12. Governing Law. This Agreement, and the rights of the parties
---------- -------------
hereunder, shall be governed by and construed in accordance with the laws of the
State of North Carolina.
IN WITNESS WHEREOF, the parties have executed this Supplemental Income Plan
Agreement as of the day and year first written above.
HOME SAVINGS BANK, SSB
By: /s/ Xxxxxx X. Xxxx
Attest: -------------------------------
Xxxxxx X. Xxxx
Title: President
/s/ Xxxxxxx X. Xxxx
-------------------------------
Xxxxxxx X. Xxxx
Secretary
[Corporate Seal] EMPLOYEE:
/s/ Xxxxx X. Xxxxxxx, XX
---------------------------------
Xxxxx X. Xxxxxxx, XX
5
EXHIBIT A
PERCENTAGE OF THE ANNUAL
INSTALLMENT PAYMENTS STATED
IN SECTION 1 OF THIS AGREEMENT
FULL YEARS OF EMPLOYMENT TO WHICH THE EMPLOYEE
AFTER MARCH 31, 1996 IS ENTITLED
------------------------ ------------------------------
1 10%
2 20
3 30
4 40
5 50
6 60
7 70
8 80
9 90
10 100
HOME SAVINGS BANK, SSB
SUPPLEMENTAL INCOME PLAN AGREEMENT
AS AMENDED AND RESTATED DECEMBER 14, 1995
____________________
1996 Amendment
____________________
WHEREAS, Home Savings Bank, SSB (the "Bank") has entered into a
Supplemental Income Plan Agreement (the "Agreement"), as amended and restated
effective December 14, 1995, with Xxxxxx X. Xxxx (original Agreement effective
date January 1, 1994) and Xxxxxxx X. Xxxx (original Agreement effective date
November 4, 1994); and
WHEREAS, the Bank has entered into original Agreements effective
March 1, 1996 with Xxx X. Xxxxxxx and Xxxxxx X. House; and
WHEREAS, the Bank has authorized an amendment to its Agreement with
Messrs. Vann, Wall, Xxxxxxx, and House, in order to address issues arising from
the Bank's upcoming conversion from mutual to stock form;
NOW, THEREFORE, pursuant to Section 11 of the Bank's Agreements with
Messrs. Vann, Wall, Xxxxxxx, and House, each Agreement is hereby amended as
follows, effective immediately on execution hereof:
1. The introductory clause of the first sentence of Section 1 of each
Agreement shall be amended in its entirety to provide as follows (with italics
herein identifying material new text):
Except as otherwise specifically provided herein, if the Employee
shall retire from employment with the Bank EITHER AT OR AFTER THE
age of 65 (the "Retirement Date") OR AT OR AFTER THE AGE OF 55
WITH AT LEAST 10 YEARS OF EMPLOYMENT WITH THE BANK (the "Early
Retirement Date"),
2. The first sentence of Section 4 of each Agreement shall be
amended in its entirety to provide as follows (with italics herein identifying
material new text):
Except as otherwise provided in Section 1 with respect to THE
EMPLOYEE'S retirement at the Early Retirement Date: in the event
that the employment of the Employee terminates prior to the time
he is first entitled to receive payments under this Agreement for
any reason other than his death, the Employee or his
Beneficiaries, as applicable, shall be entitled, upon the
occurrence of the Employee's 55th birthday or prior death, to
receive the percentage of the applicable annual payment described
in Section 1 above determined by Exhibit B attached hereto and
incorporated herein by reference.
1996 Amendment
Supplememtal Income Plan Agreement
Page 2
3. The second paragraph of Section 6 of the Agreement shall be
amended in its entirety to provide as follows:
Except as otherwise provided in Sections 1, 2, or 3 as
applicable, in the event that, on or before the occurrence of an
Employee's Retirement Date or Early Retirement Date, a
"Termination of Protected Employment" occurs following a "Change
in Control" (as these terms are defined in the next two
paragraphs), then the Employee shall be deemed to have retired as
of his Early Retirement Date and the provisions of Section 1 shall
be deemed applicable, except that the Early Retirement Date shall
be deemed to be the date that such Change in Control shall occur.
4. Section 6 of the Agreement shall be amended further by adding the
following two paragraphs immediately at the end thereof:
For purposes of this Agreement, "Change in Control" shall
mean any one of the following events: (i) the acquisition of
ownership, holding, or power to vote more than 25% of the voting
stock of the Bank or NewSouth Bancorp, Inc. (the "Company"), (ii)
the acquisition of the ability to control the election of a
majority of the Bank's or the Company's directors, (iii) the
acquisition of a controlling influence over the management or
policies of the Bank or of the Company by any person or by persons
acting as a "group" (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934), or (iv) during any period of two
consecutive years, individuals (the "Continuing Directors") who at
the beginning of such period constitute the Board of Directors of
the Bank or of the Company (the "Existing Board") cease for any
reason to constitute at least two-thirds thereof, provided that
any individual whose election or nomination for election as a
member of the Existing Board was approved by a vote of at least
two-thirds of the Continuing Directors then in office shall be
considered a Continuing Director. Notwithstanding the foregoing,
the Company's ownership of the Bank shall not of itself constitute
a Change in Control for purposes of the Agreement. For purposes of
this paragraph only, the term "person" refers to an individual or
a corporation, partnership, trust, association, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization
or any other form of entity not specifically listed herein.
For purposes of this Agreement, a "Termination of Protected
Employment" shall occur if: (I) The Employee is terminated without
Just Cause, with "Just Cause" meaning, in the good faith
determination of the Bank's Board of Directors, the Employee's
personal dishonesty, incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, intentional failure to
perform stated duties, willful violation of any law, or rule or
regulation (other than traffic
1996 Amendment
Supplememtal Income Plan Agreement
Page 3
violations or similar offenses) or final cease-and-desist order;
provided that no act, or failure to act, on the Employee's part shall
be considered "willful" unless he has acted, or failed to act, with an
absence of good faith and without a reasonable belief that his action
or failure to act was in the best interests of the Bank or of the
Company; or (II) the Employee voluntarily terminates employment for an
event that constitutes "Good Reason", which shall mean any of the
following events, that has not been consented to in advance by the
Employee in writing: (i) the requirement that the Employee move his
personal residence, or perform his principal executive functions, more
than 30 miles from his primary office as of the later of the Effective
Date and the most recent voluntary relocation by the Employee; (ii) a
material reduction in the Employee's base compensation in effect on
the date of the Change in Control; (iii) the failure by the Bank to
continue to provide the Employee with compensation and benefits in
effect on the date of the Change in Control, or with benefits
substantially similar to those provided to him under any of the
employee benefit plans in which the Employee now or hereafter becomes
a participant, or the taking of any action by the Bank which would
directly or indirectly reduce any of such benefits or deprive the
Employee of any material fringe benefit enjoyed by him; (iv) the
assignment to the Employee of duties and responsibilities materially
different from those normally associated with his position; (v) a
failure to reelect the Employee to the Board of Directors of the Bank,
if the Employee has served on such Board at any time during the term
of the Agreement; (vi) a material diminution or reduction in the
Employee's responsibilities or authority (including reporting
responsibilities) in connection with his employment with the Bank; or
(vii) a material reduction in the secretarial or other administrative
support of the Employee.
5. Section 7 of the Agreement shall be amended by adding the following
paragraphs immediately at the end thereof:
Notwithstanding any other provision of this Agreement that may be
contrary or inconsistent herewith, not later than ten business days
after a Change in Control, the Bank shall (i) deposit in a grantor
trust (the "Trust") that is designed in accordance with Revenue
Procedure 92-64 and has a trustee independent of the Bank, the Company
and any successor to their interest, an amount equal to the present
value of all benefits that may become payable under this Agreement,
unless the Employee has previously provided a written release of any
claims under this Agreement, and (ii) provide the trustee of the Trust
with a written direction to hold said amount and any investment return
thereon in a segregated account for the benefit of the Employee, and
to follow the procedures set forth in the next paragraph as to the
payment of such amounts from the Trust.
1996 Amendment
Supplememtal Income Plan Agreement
Page 4
At any time or from time to time following a Change in Control,
the Employee may provide the trustee of the Trust with a written
schedule directing that the trustee pay to the Employee the amounts
designated in the schedule as being payable pursuant to this
Agreement. Within three business days after receiving said notice,
the trustee of the Trust shall send a copy of the notice to the Bank
via overnight and registered mail (return receipt requested). On the
fifth business day after mailing said notice to the Bank, the trustee
of the Trust shall pay the Employee the amount designated therein in
immediately available funds, unless prior thereto the Bank provides
the trustee with a written notice directing the trustee to withhold
such payment. In the latter event, the trustee shall submit the
dispute to non-appealable binding arbitration for a determination of
the amount payable to the Employee pursuant to this Agreement, and the
costs of such arbitration (including any attorneys' fees incurred by
the Employee) shall be paid by the Bank. The trustee shall choose the
arbitrator to settle the dispute, and such arbitrator shall be bound
by the rules of the American Arbitration Association in making his
determination. The parties and the trustee shall be bound by the
results of the arbitration and, within three days of the determination
by the arbitrator, the trustee shall pay from the Trust the amounts
required to be paid to the Employee and/or the Bank, and in no event
shall the trustee be liable to either party for making the payments as
determined by the arbitrator.
Upon the receipt of the Employee's written release of all claims
under this Agreement, the trustee of the Trust shall pay to the Bank
the entire balance remaining in the segregated account maintained for
the benefit of the Employee. The Employee shall thereafter have no
further interest in the Trust pursuant to this Agreement.
6. Nothing contained herein shall be held to alter, vary or affect any of
the terms, provisions, or conditions of the Agreement entered into thereunder,
other than as stated above.
1996 Amendment
Supplememtal Income Plan Agreement
Page 5
WHEREFORE, on this 23rd day of October, 1996, the Bank hereby executes this
1996 Amendment to the Plan.
HOME SAVINGS BANK, SSB
By /s/ Xxxxxxxxx X. Howdy
----------------------------------
Its Chairman of the Board
October 23, 1996
-------------------------------
Date Attest: Xxxxxxx X. Xxxx (Seal)
---------------------
Witness:
Xxxxxx X. Ipoch /s/ Xxxxxx X. Xxxx
------------------------------- ------------------------------------
Xxxxxx X. Xxxx
Witness:
Xxxxxx X. Ipoch /s/ Xxxxxxx X. Xxxx
------------------------------- ------------------------------------
Xxxxxxx X. Xxxx
Witness:
Xxxxxx X. Ipoch /s/ Xxxxxx X. House
------------------------------- ------------------------------------
Xxxxxx X. House
Witness:
Xxxxxx X. Ipoch /s/ Xxxxx X. Xxxxxxx, XX
------------------------------- ------------------------------------
Xxx X. Xxxxxxx, XX
